Car parts manufacturers fined 3.5 bln won for price rigging

South Korea's antitrust watchdog said Thursday it has slapped 3.5 billion won ($3.2 million) in fines against car parts suppliers found to have engaged in illegal cartel activities.

The Fair Trade Commission said two Japanese companies and local subsidiaries, as well as a local manufacturer were found to have rigged prices in the past in violation of the country's anti-collusion rules.

The companies supplied parts to Hyundai Motor Co. and Kia Motors Corp. that effectively control around 75 percent of the local car market. The carmakers are flagships of Hyundai Motor Group, the world's fifth largest automotive conglomerate.

According to the commission, Japan's Denso Corp. and NGK worked together to artificially keep prices of exhaust gas temperature sensors at set levels. The companies won four contracts from Hyundai and Kia by fixing prices from 2008 that allowed them to maintain healthy margins. NGK had used its South Korean affiliate Woojin Industrial Co. to bid for the sensors.

The FTC said besides slapping a 523 million-won fine on Denso and a 916 million-won fine on NGK, the companies have been ordered to halt such activities in the future.

The corporate regulator added that Denso Corp., Denso Korea Automotive Corp., and Yura Tech were found to have worked together to fix prices in advance on ignition coils supplied to the carmakers between May 2010 and August 2011, and won two contracts.

Denso Korea has been fined 837 million won, with Yura, a South Korean producer, getting hit with 418 million won in fines. Denso Corp. was only ordered not to engage in illegal activities, since it does not ship ignition coils to South Korea directly. Denso Korea is 100 percent owned by its Japanese parent company.

Besides the two cases, the FTC said Woojin and Yura formed a cartel from 2008 through 2010 on the supply of spark plugs. They won a total of three contracts and even agreed to work together for four more years.

Woo jin was fined 597 million won with 211 million won in penalties being slapped on Yura.

The FTC said its latest actions sent a clear message that it will not tolerate price rigging among companies that dominate certain industrial sectors.

It said such measures can lower the price of finished products that can benefit consumers and improve the price competitiveness of carmakers.

"By fueling competition among suppliers, the latest move is expected to improve quality, spark innovation and services that can bolster the car industry as a whole," a FTC official said. (Yonhap)